I mentioned previously that I did not actually have a view on Gregory Mankiw's appointment as chairman of Council of Economic Advisors. John Quiggin's suggestion that I did, as well as an email from a reader suggesting (correctly) that I wasn't really commiting to any substantive position on the supply-side debate, got me thinking about what economists do. Some (and I emphasize some economists worry about what questions like what will happen to GDP next quarter, and what effect tax rates have on the growth of GDP. They worry (professionally, not just personally) about whether the economy is in a recession, and whether it is going to come out of it. They think about fiscal policy, and they think about monetary policy. These sorts of economists are, broadly and loosely speaking, frequently (although I think misleadingly) called macroeconomists. Brad DeLong and John Quiggin are among them. [Don't read that as a straight-jacket or anything; DeLong for example has done some superb work in economic history.] I am not a macroeconomist. I mean really not. And therein lies a story about how people get into this business. If you are not interested in what economists do, you really, really, want to stop reading now.

I took my first class in economics in 1975, as a sophomore at the University of Chicago. The summer before, I read two little books by Robert Heilbroner, an economist at the New School for Social Research (these days renamed the more boring New School University), called Understanding Microeconomics and Understanding Macroeconomics. (They have since been turned into a big textbook coauthored by Lester Thurow of MIT.) I first read Understanding Microeconomics, and I remember, although I can't find the book any longer, how it began. Heilbroner said that microeconomics may not seem appealling because it wasn't about the big issues of the day: inflation, unemployment, national income (he turned out to be wrong about that, but that is a different story). But nonetheless, he assured the reader, it is very important for understanding much of what goes on in the world. He was surely right about that. I was captivated; I fell in love (yeah, yeah, big time geek alert). I can't remember all his examples, and a lot of good ones were missing, but they were all about choices and opportunity costs. Things like: do you raise the minimum wage? What happens to incentives to hire employees, to train people, to the search for alternatives to employees (like heavy machinery)? The point wasn't the policy conclusions. It was to emphasize that every choice carries with it a cost, that you always have to ask what are the alternatives, and that you don't get to say "I want that" without asking what you are giving up. I remember thinking, if microeconomics is this exciting, macroeconomics must be spectacular, because Heilbroner said macroeconomics was where the real excitement is. Boy, was it a let-down. Maybe because Understanding Macroeconomics was early Phillips Curve stuff, or just badly written, I did not know, but I was bored. Microeconomics was clearly the exciting stuff, and I have never recovered. My first two courses in economics were the two-quarter intermediate microeconomics sequence. (In those days, Chicago did not teach principles: only intellectually prissy places like the Ivy League taught principles.) They were taught by Sam Peltzman and Ed Lazear (now at Stanford). Lazear was an extremely capable teacher, who made very messy things seem easy, and who was seemingly able to teach anybody almost anything. Peltzman, though, was extraordinary. It wasn't merely that he was clear. He made economics seem real, about all sorts of real problems that you could tackle. It would be wrong to say we admired him. We thought he was a god. Peltzman is a New Yorker who pronounces "because" not the way most of us knew, as "bee-cuz", but rather as "bee-caws". So there were all these midwestern and west coast kids walking around like idiots, saying bee-caws, not caring that other kids laughed at us, because we were like our hero. If you took economics from Sam Peltzman, it was nearly impossible to think there was anything more interesting. Then macroeconomics hit. Two quarters of a post-doc with poor English, the kind of inept teacher that Chicago's economics department was fond of dumping on its undergraduates. Before I left Chicago, I took two classes from Donald (now Deirdre) McCloskey, all about cool stuff like scattered plots and share cropping [here's a puzzle for you: why do people think "poor and down-trodden" when they hear sharecropper, who get a share of the gross, but think rich and successful when they hear an actor gets paid a share of the gross? It isn't an easy question.] I also barely survived Gary Becker, who terrified me (and still does). How could inflation compare to sex? GDP accounting has nothing on divorce (although in an economist's mind, they are certainly connected).

In grad school at the University of Washington, I learned microeconomics from Stephen Cheung. He was a wretched teacher by any conventional measure. He never came to class prepared. What he did was walk into class and talk about whatever problem he was thinking about. [Why do all the good seat sell out first?] He was amazing. He used to say, in his heavy Chinese accent, "Economics so powerful, it scares me." But macroeconomics was a disaster, to be gotten through. One of our teachers hated teaching so much, he nearly fell asleep in class. One day he was droning on, sitting in front of the blackboard, and decided he should draw a graph, but was too bored to get up, so he wrote on the board behind him. He never finished the diagram, because he dropped the chalk half-way through, and couldn't be bothered to get up. My dissertation advisor, Keith Leffler, made his fame by giving an answer to the question, "Why do you sell cars with gorgeous girls and with Michael Jackson?" (and the answer really isn't about sex).

So, chalk it up to the mix of teachers I had. Chalk it up to a perverse personality. But don't ask me whether Greg Mankiw should be chairman of the CEA. I would rather figure out why a man that busy has four children.

Fascinating bio...

I admit, though, the one thing that made me stop for a moment was reading "I took two clases from Donald (now Deirdre) McCloskey".

And two different thoughts came to mind:
1) What are the economic ramifications of changing gender? You may talk about sharecroppers vs. actors, but this is surely the real cutting edge - are there studies on it?
2) Ireland is supposedly changing, but do you think the powers at UCC would ever support a visiting lectureship from Deirdre?

Does economics still hold "rationality" as a central tenet, when actual human behavior appears to reflect a much more irrational reality?

William, I've updated my post to clarify your position, and I think convergence is close, so I'll restate my main reason for asserting that Moore is dishonest, to which I don't think you've yet responded.

In his original article, Moore claims that there is 'a multitude of brilliant supply-side academics', but this is clearly untrue, at least if the terms 'brilliant' and 'academic' are used in the usual fashion and 'supply-side' is used to mean 'acceptable to Moore'. I dont' see how it's possible for Moore to be honest in making this claim, given that he clearly has no evidence to back it up.

If you reread my original post, you'll see that it was precisely on this point that I called Moore dishonest. The examples were misleading, and I said so, but weren't, in themselves, clear evidence of dishonesty.

I'd add that the response of NRO to your email supports the case for dishonesty.

I thought macro was the area to study. It was sexier in a public policy sort of way. But I stumbled upon Ludwig von Mises and the Austrian School and saw through much of the extreme assumptions in macro. I'm sticking to Hayekian-inspired micro.

Speaking of Steven Cheung, there seem to be a lot of things he didn't think through very clearly:

http://seattletimes.nwsource.com/html/localnews/134622162_phony260.html

A tony shop in the heart of Seattle's Pioneer Square gallery district
beckons buyers to own a piece of Chinese history:

A rare glazed tile from the Han Dynasty (206 B.C.-A.D. 220), for sale for
$900. [snip]

To the eyes of tourists and window-shoppers, the gallery's wares may seem
striking in their age and beauty. To the eyes of experts, however, they are
something quite different.

[snip]

They are fakes, a Seattle Times investigation has found.

[snip]

The operators of the gallery, one of them a renowned economics professor and
Nobel Prize candidate who has taught at Hong Kong University and the
University of Washington, insist their goods are authentic and say they are
"baffled" by findings otherwise.

[snip]

Steven Ng Sheong Cheung, 67, is a wealthy Hong Kong-born U.S. citizen with
homes in Seattle, Hong Kong and Shanghai. He is famous in East Asia for his
economics research, his books and his newspaper columns, and he has been
Nobel laureate Milton Friedman's traveling companion on Friedman's trips to
China and Hong Kong. Cheung himself has been a candidate for the Nobel in
economics, finishing in the top 25 in the 2001 balloting.

[snip]

Cheung says he developed an interest in antiques from his economics study of
the effect of information on pricing in volatile markets. Although he
confirms that he acts as an "advisor" to Thesaurus Fine Arts, he denies he
is an owner or that he pays [its manager, Edith] Crighton. He would not say
whether his family owns it, saying ownership needs to be kept secret because
of security concerns.

Many factors point to Cheung's active participation in the business:

...Crighton, listed in state papers as the company president, said "the
principal owner" is an "Asian professor" who owns homes in Hong Kong and
Seattle and whose daughter was getting married that evening in Seattle. The
description fit Cheung precisely; that night, his daughter was married at
St. James Cathedral and had a reception at SAM.

...Crighton, a former interior designer, says the Seattle law firm of
Stafford Frey Cooper referred her to Cheung, who needed a store manager.

...A woman named Linda Su - Cheung's wife's name before marriage - is listed
as administrator of www.thesaurusfinearts.com, the company's Web site.
----------endquote--------->>

I've never met Cheung personally, but the fond recollections of every student of his that I've met -- and for some reason, I seem to know a lot of UW Ph.D.'s, suppose there's something to that, eh? -- makes me think that he's an excellent professor. His writings are certainly wonderful, even to me, a macroeconomist. (Sorry, Sean, but some of us like Hayek and stay in macro!)

I think the thing to remember in all this is that the fellow vetting Bush's economics team is Martin Feldstein, and he uses Mankiw's text in his Ec 10 class at Harvard. Despite what Feldstein has said about supply-side economics in the past, he isn't one himself. I heard someone tag Feldstein derogatorily as "conservative Keynesian." Mankiw is pretty clearly a "new Keynesian", so his appointment by Bush comes as no surprise to me. I've used his textbook too, and other than more faith in activist policy than I have (OK, I have none) it's pretty mainstream fare. And his intermediate macro text is less Keynesian and more conservative than his principles text.

So frankly, I have no idea why Moore gets his panties in a bunch and I don't care.

kb wrote:

>Despite what Feldstein has said about supply-side economics in the past, he isn't one himself.

Actually, during the 1980s (I don't know about recent years) Feldstein did advocate what he called "supply side economics" -- in front of hundreds of Ec 10 undergrads no less (actually it was officialy called SA 10).

But Feldstein was using the term "supply side economics" differently from how most of the press, and economists, were using it.

When Feldstein talked about "supply side economics" he meant the usual standard conservative low-tax small-government policies, the type of policies that an Alan Greenspan would like.

To most other people, "supply side economics" meant the beyond-the-pale fringe stuff of Art Laffer, etc.

This was a perpetual source of confusion for the undergrads: it was well-known that Reagan and his advisors (Donald Regan, etc.) were feuding with Feldstein over the seriousness of the deficit and over tax policies. The feuds were even fodder for editorial cartoons.

But both camps were claiming the mantle of "supply side economics".

--MKT